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Congratulations dude
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Most 401ks allow you to take out a loan up to half of the 401k maxed at 50k i think. You pay the loan back to yourself and there are no penalties against you.
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It really depends on the situation if it helps lower your monthly payments and you have a healthy balance in your 401k not a bad plan at all, however just remember this withdrawal will hit you tax wise when its time to file
Lastly while the payback part is true, dont forget that if you leave that job or they get acquired the money borrowed is due back for payment asap and most times you wont have that so you'll get hit with taxes.
If your looking to borrow and its sub 10k borrowing from IRA might be a better option.
CrownRoyalDaddy
formerly tdoggy57
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Settled in march. Just moved in this past weekend feels GREAT
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borrowing works a little different than an early withdraw. the main issue with borrowing is that you will get double taxed on the borrowed amount. the point of a 401k is to contribute money before tax and then you pay taxes when you withdraw (at retirement).
when you borrow from your 401k, your 401k plan will instruct your company to deduct payments from your paycheck. these payments are after tax monies. when you retire and withdraw your 401k, you will get taxed on that amount again..because to the IRS, they only see that the monies in the 401k were contributed pretax. they do not considered that you paid the borrowed amount back with taxed monies. you also need to make sure you're safe at your job because you will have to pay it back in full the moment your employment is gone.
personally, I would see if I could borrow the money from someone and pay them back with interest. Monstar mentioned the 10k and that works too. It's per person if you have a sig other/wife, it'll be 20k..assuming each person has 10k in their IRA.
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What if its from a 401k from a previous job? Just sitting there and not rolled over. My co-worker was also saying something about first time buyers dont need a down payment, but under what circumstance?
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I don't think you can. If you were to take out from your former 401k, it will be consider as a "withdraw" and you'll be assessed the withdraw penalty and taxes. I could be wrong and your 401k may allow it.
If you're intent on "borrowing" , you can always transfer the 401k from your previous job into the 401k of your current job. You can then borrow that money (within the limits).
I don't know much about those zero down loans because it's usually too good to be true. Really do your homework because there will be a cost associated to it. Home buying assistance programs or what I considered home assistance are a different story. I think VA and certain (good) credit unions offer zero or low down. Some cityies have a buyer program. You can see if you qualify for those.
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Finally got the inside track on a place, after missing out on a few others in this crazy market. Put a deposit on this today, and crossing our fingers everything goes smoothly.
Needs a little drywall but should be good lol. And to the 401k thing, dude before me said what I would have about everything.
IMO if you gotta pull a little out, I’d take that hit and avoid the PMI if possible.
Needs a little drywall but should be good lol. And to the 401k thing, dude before me said what I would have about everything.
IMO if you gotta pull a little out, I’d take that hit and avoid the PMI if possible.
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We purchased our home with a FHA loan and it sucks. You pay a fee just to take out the loan which you don't pay if you go conventional. You're paying PMI during the loan. You have to refinance out which can be expensive in some areas. We live in NYC, homes are expensive so it's hard to save at least 10% for a multi family home. The reason we did it is because if we were to rent both units out it would cover our mortgage and then some. The PMI is tax deductible if you make less than 100K. My girl and I aren't married, we both make way over 100K combined and we were still able to claim it on our taxes. We also thought the home would appreciate. We bought it for 749k in Oct 2016. The cheapest 2 fam house in the neighborhood is 879k and the next one after that is 990k.
Do your research and see if it makes sense for you.
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401(k) loans are not taxed if they are re-paid by the borrower. However, if the loan is not repaid when you leave your employer and roll the 401(k) into an IRA, the loan amount is considered a distribution and you will owe tax on it as well as a penalty if you are under 59 ½. - Investopedia
First the loan repayments are made with after-tax income (that's once) and, second, when you take those payments out as a distribution at retirement you pay income tax on them (that's twice). ... The answer is no, you do not pay any more taxes with a 401k loan than you would on any other type of loan. Think about it.
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before you tell someone to think about it - you should make sure you have your info correct. you totally missed the point on how it gets doubled tax, even though I think i explained how pretty clearly. so try researching on the pro vs cons of borrowing from your 401k on the internet. you should be able to find an article that explains to you on how you'll get double tax on the repaid/borrowed amount.
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Interest rate at 5% and 17k closing cost sound about right? House for almost 600k if it matters, 797 credit score according to credit karma also.
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That seems pretty low for closing costs on a $600k house. Interest rate is about right on a conventional.
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Interest rates are about 4.5-5% at the moment
Yea the closing cost seem pretty low... My coworker just bought a house in Long Island low to mid $400s and his closing cost were $17k
Yea the closing cost seem pretty low... My coworker just bought a house in Long Island low to mid $400s and his closing cost were $17k
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This was in a house I showed yesterday 
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haha wtf - what was actually behind it?
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Any advice / info on obtaining a co-op apartment? I'm aiming to get one in Queens in the near future. Just want to know things I should be aware of during my search to make the process as seamless as possible. Thanks.
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goddamn rates are 5% now?
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yea. but of course realtors will continue to insist the time to buy is now. for them its always the time to buy. their job and bonus cut depends on it. when is a realtor ever going to say its not a good time to buy lol. I see all these realtors on IG--hell anyone in the real estate business continue to say its great time to buy. i wonder what they were saying during the crash when everyone was doing short sales and forclosures.
for fellow bay area folks.. how much crazier is it going to get:
http://www.kron4.com/news/bay-area/...-2-million-just-for-land-torn-down/1174236446
Are we going to see 100 year old fixer upper homes selling right now for 1mil be 2 million in a few years
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House across from me had 13+ year renters and they booted them in April, put tons of work and money into the house. Just had the open house yesterday and there had to be 15-20 cars that came through. I'm interested in seeing what it goes for
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I mean, rates are just going to keep going up. They aren't wrong.
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Building SFR's & condos with containers has got to be the present and future. Traditional building is too expensive. Anyone know any developers who build with 40' containers? There are some really cool homes that are being built using containers. I've contacted a few developers to find out the costs to design - build- install and move in.
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Depending on your situation, it probably IS a good time to buy. 5 years ago when inventory was low and housing was competitive, it was a great time to buy. Last year when rates were going up and so were prices, it was a great time to buy. Just because it's not a good time for you to buy now with your financial situation doesn't mean it's not a great time to buy. Like we always tell our clients, if you could have bought the same house 10 years ago, would you? If so, then why wait until 10 years from now to buy a home if you're able to from a financial standpoint and don't plan on moving for the next 5-10 years?
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Boderline of berkeley, houses there are going for a million plus.
